SETO-Method

[quote Make sure you get the monthly direction right! Let's say you think USD/CHF is going to go down. But then it is actually going up more often than not during the month. Then you wouldn't trade USD/CHF. You would wait till USD/CHF starts to go down again. Happy pipping![/quote]

I rather look at the weekly trend. Even if you zoom in you get about 50 candles on your chart, about a year.

My point is that on the monthly chart you might think that the trend is strong, but you cant see that the pair has been in a range for the last few weeks, which might continue for a while. It might save you a few losing trades by concentrating on other pairs.

I like you style

Hi Seto.

Have been reading original pipeasy's thread. nice to see idea is popular.

What do you think about GU direction? IMHO it is trapped in range of 1000 pips from 1,53 to 1,63. We had rejection of 1,63 recently, so maybe it worht to start building short positions? it even could be a bit late, but will keep waching for opportunity to short.

P.S. Ozzy looks like the same situation, but not reached upper range yet.

Hi all
yes i like your way seto
but i am also have a comment here.
I have msc degree in engineering, i am a trader since 10 years .
I have tried as you have said many and many and many brokers, indicators, ea's ...etc,..............non is working..!!!
Loss after loss...............
I have as you said again, learnt the mt4 programming, and may be i will make the perfect ea................. No, no, no.........many ea's i have written, used from web sites, even i have bought dozens ....................but the results are the same ------------------ loss after losses.
Then i said............... Stop.
I must find my way through this heavy road of forex, when i am up, the market is down, and vice verse.................stop
ahhhhhhhhhhhhhh
then i have built a very stupid ea...... Yes a very bad ea - simple ------------ i was laughing many days for the results.................perfect - perfect --- perfect,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,more than 90% correct deals with minimum profits of 5 pips to 10 pips per deal,

what is happening, when i read your way again i was wondering .................. You are right.............the 13 rules are real to be followed and the stupid ea that i have built is doing the same ,,,


it does not matter if you make 10 deals per day or only 1 , at the end of the day you need to choose 2 major things, monthly direction and the pair - only 2 to 3 pairs at most per day. Then wally , each pair 20 to 30 pips profit. X 3 = 60 pips per day...... Perfect --- -stress is less, and life is hilwa ( nice ).

Eur/usd, .... Same as you ---------------we call them majors.


Only buy,,,,,

only buy......


Do not make sell......................................

This is my stuipd ea.
Only buy in the upper trend direction of the 3 -4 candles of the monthly chart,

if this pair is south, i do not use it, i go for another 2 going north and yes yes i am making real profits.

Thank you

samer

Hi all,

Thank you for being so supportive! I hope you have a wonderful time with your family this Christmas.

Before I continue on with the topics, I would like to ask for some feedback. If you have time to tell me how I can do better, I would love to hear it.
I also want to know what concepts helped and what didn't.

 

1. What helped
2. What didn't help
3. What you would like to read more
4. What is unclear
5. What would make it even better

Merry Christmas!

Hi Setoeric,
Your way of trading is great and makes sense. I think the hardest thing to do is getting started with a winning note hopefully, especially when you have a small account. I will be following your tread with great interest. Thanks for sharing.
Merry Christmas to you all.

I posted these questions, but as yet have received no answer.

You assume that 4 out of 20 trades will survive, that will mean that each surviving trade would have to profit on average 250 pips just to cover losses.
Then you also have to take into account how many of these survivors will hit their stop during the following months.
Look at GBPUSD, NZDUSD and USDCHF for October. Any trade, long or short may have survived to the end of the month, but would have been stopped out since.
Over the period of 6 months, natural market fluctuations will take out a lot more than 16 out of 20 trades.

This may or may not have worked over the last 6 months. If it did, it doesn't mean that it will work over the next 6 months. You would have had to be trading this style for many years before you could be sure that it worked.
How long have you been trading this way?
If only 6 months, then it is not so much different to trading H1 charts for 1 week and then believing that you have the perfect system because it worked for 1 week.

Gumrai, yes, market for some pairs is in range now. in worst case you can build equity inside of this range, or just to sit and wait for breakout of the range. It is sand that PipEasy not posting any more. he was trading kind of same idea from 2008.

and, IMHO, trading USDCHF last 6 or even more months == trading EURUSD.

Thanks Seto, Happy Holiday!

so far so good, nothing weak really, especially what you've presented is well-sized, and directly to the point

the unclear part, to me, may be exact trading examples.

or use a few of your trades of, say, 2nd half of 2012, to illustrate your entries, exits, and more important, your management of these several trades to meet what goal/plan......

it is like that you are showing us your war from how you form and charge, AND why you form that way and charge that way (you've explained some principles, but not all, and not with examples). but take time, i understand that this is a business that needs no hurry.

Posted by setoeric12
Hi all,
What helped
What didn't help
What you would like to read more
What is unclear
What would make it even better

thanks for starting this thread
it has been a breath of fresh air. I agree with you completely and would love to here more by you walking us though with some concrete examples of managing trades and risk

thank you

no offense, but is it the blind leading the blind or do we get to the meat and potatoes soon?!?

Hi Seto,

Thank you for sharing your method/system.

I have read Pipeasy's thread few times and i like his way. So far I like the information you have shared and I will keep following your posts. Happy holidays..

-maaj-

Hi all,

I hope you guys have an amazing Christmas this year. Today, I will cover the rest of the topics. I read all the feedback and notice the request for trading examples. Yes, I will post them up later. Also, I have ranked the topics based on importance. Because everyone can have different entry and exit methods. So it is important to understand the overall structure of trading strategy. You can use MACD, BB Bands, and I can use Support and Resistance or simply draw a line, which are all equally valid. Some of you may notice that I haven't answer your question, maybe it is already answered here. : )

Exit - Cover losses and then some

After you enter 20 trades a month, you sit and let time pass. Meanwhile, you can relax, continue on your day job or anything that you love to do. There may be the impulse to constantly look at the chart. But over time, you will learn to let it run by itself because the trade is working for you. Imagine the trade is like a soldier, and the longer he survives, the more money he makes for you. So relax and let it run. Sometimes it may die and hit your stop loss, but that's okay because we weren't expecting a 100% success rate anyways. Your success rate will improve over time as you get more practice.

Generally, here are two reasons to exit:
1. Cover your losses
2. To earn a profit

For the covering your losses, it will be recovering the losses within the 20 trades this month. I don't mix the losses between each month, so I can evaluate them separately and subjectively. This is important because I can change bits and pieces of my strategy and I can see how well it is working.

For earning a profit, you may ask, why can't it be 5 months or 7 months or even a year ? Yes, it can. 6 months is a rough guideline that you should hold on to the position and let it run. Ideally, I aim for 1000 to 2000 pips per trade, depending on the monthly trend. The basic principle is:

If the monthly trend continues, hold on to it.

On the other hand, if you expect the monthly trend to change, then you would let it go and close out a few positions as you go long. Most of the time, there isn't a perfect location to exit and that is okay. Just do the best you can and the ultimate goal is to earn money.

Line - the only technique I use

This topic is special because it focus on how I enter a trade. I have tried many different methods and different sequences to do things. If you want to find your own method, that's okay. Remember to keep it simple. Complicated doesn't mean effective.

Keep it simple. Effectiveness is what we want

For me, I like to print out the chart and draw trend lines by hand. I find this is the most effective way so far because I am a visual person. In the past, I have tried to keep a database of trade images (png files). But I find it very hard to go back and evaluate how I do. For written print records, I can go back instantly. In this post, I am provide with some useful links on how to draw trend lines.

How to draw trend line for stocks
http://www.swing-trade-stocks.com/draw-trend-lines.html

Trend line Break
http://www.forexfactory.com/showthread.php?t=163012

Keep in mind that this system is extremely subjective because every day we rank, sort the trades and we draw our own trend lines. That is okay because as long as we are "consistently subjective", then we are able to find the best trade of the day and enter it. But at the same time, you can improve day by day because these are not cold hard rules. Instead, I have given you guidelines and what to expect.

As you analysis the same pair again and again every day, you might have the impulse to just carelessly draw the same lines and thinking that "why would I want to draw it over and over again?". But each day, the market changes. It is alive. You are going to have new insights. You may realize that some trend lines you draw earlier is no longer relevant. You may notice a trend line that was never there before. That's why I suggest you to clear your chart every day and start drawing new ones again. It is like starting with a fresh mind. Ultimately, it is good practice for you.

Start with a fresh graph every day and draw your trend lines

When I trade, I like to start drawing from the past and into the future. This means not all the trend line will be useful because most of them broke, or not near where the current price is. But it helps me to notice patterns and gives me an opportunity to think about the currency pair.

As long as the latest trend line doesn't break, it is considered to be valid and I continue to trade in that direction. But once it breaks, I would give it a low rating in my mind. I either wait for it to form a new pattern or a I trade other currency pairs.

If you don't like drawing trend line, you can substitute it with any other method you want. The key is always follow the monthly trend and select the best pair of the day. That will save you a lot time for self doubt and switching between buy and sell.

(I will post up examples in the future)

Leverage - Speed of money making

This is the last topic (for now). You may heard it over and over again, leverage may make you and break you. But leverage can also help you earn a lot of money and Forex offers one of the best leverage ratio out of all the markets. So we just have to learn how to use it.

As I covered earlier, you want to have an average number of pips for stop loss. That is to calculate how much money you would lose per trade. Let's stay you have $1000. And you are willing to risk $10 per trades, you just have to adjust the lot size to match with the nominal value ($10). Then you would place 1,000 lot with a 100 pips stop loss.

The key is once you find out how much you risk per trade. You can calculate how many trades you get to enter. If you have $1000 and you risk $10 per trade, you can enter a maximum of 100 trades.

You can adjust the capital size base on your risk tolerance which determines how fast you would make money.

A simple equation would look like:

Account Balance / Risk per trade = # trades you can enter

Conclusion
There are many ways to trade and everyone has their own search. My method may not work for you and that is okay. If you can take one thing from the post, remember to record your trades and list out step by step how you enter and trade. Unrecorded success is hard to analysis and being improved on.

There is no best way to trade. I believe that every trade is on the road to improve their own method. It is just like ice cream, there is no "best favour". You just have to find your way. And you can take as much time as you need because it is not a one day journey.

If they can do it, you can do it too.

---------------------------


Thank you all for all the support and questions. I am very excited to answer them! I will also post some examples up for feedback.
I hope you all make lots and lots of pips.

THANKS I dare to say this is just what the doctor ordered for a lot of us

Intresting. What do you make a year in percent ? and how long have you been trading like this. If i dont missremind easypips could make 400 percent a year or even more. And he had traded for some time.

Best regards

I have already asked him twice, but he doesn't seem to want to tell us how long he has been trading this way.
I would have to assume that he has not been trading it for very long. When a method requires holding trades for 6 months or more, you would need to trade it for years before you could be sure that it will work. If he has only been trading it for 6 months, that is not anywhere near long enough to have confidence in the method.

I think he already mentioned that he will answer all questions once he finished explaining the method. Can we wait for that???? Why we need to disturb the flow?.

Just give the man time to make his case! Come back in a couple of days to get the whole picture or more of the picture.

wonder why the thread starter started a new thread seeing it is the same method as Graham`s? must be missing something.

Who is Graham?